Why Lower Oil Prices Are Not Impacting Putin

Russian President Vladimir Putin delivers a speech during an opening ceremony of the MAKS International Aviation and Space Salon in Zhukovsky, outside Moscow, Russia, August 25, 2015. REUTERS/Maxim Shemetov

John Lloyd, Reuters: Why $40 oil is killing Iraq, Venezuela and others, but not Russia

It’s not the economy, stupid. At least it isn’t where hearts are warmed by the fiercer flame of nationalism, rather than rising living standards.

Oil prices as low as $40 a barrel are separating the oil haves from the oil have-nots. The oil producers happily rode a wave of high oil prices for years, buying popularity with increased state spending while excusing themselves from the hard pounding of legitimate economic reform. The oil-buyers — like India and Egypt — now enjoy prices as low as a third of those they paid as recently as two years ago and can cut fuel subsidies, saving spending or redirecting it to broader social uses.

WNU Editor: John Lloyd believes it is Russian nationalism that is keeping Putin's popularity high (and immune) from declining oil prices. On this point I am not sure. Putin's popularity is going down albeit slightly .... Higher prices dent Putin's sky-high popularity: paper (Reuters), but his popularity is still high because of other factors. Case in point .... national security. National security and defense has always been the number one priority for most Russians .... and if given a choice between economic hardships or feeling safe .... feeling safe would win all the time. This is not a nationalism issue .... it is a product of experiencing years of destructive wars and incredible bloodshed and then educating future generations on what life was like during these conflicts. That is why Russians do not need a Putin to tell them when there are threats and dangers on the horizon .... they already know. Putin also knows this .... so that why he is always positioning himself to reflect these Russian worries and concerns so that when the Russians do circle the wagons, he makes sure that he is in the middle of this circle. As to $40 oil .... I know among my own family and friends in Russia they are of the opinion that lower oil prices are unfortunate .... but so what .... they are of the opinion that this is all temporary, and they will rise in the future.